Twenty years after its first discovery offshore Israel, Noble’s giant Leviathan field is set to transform the economics of both Israel and Egypt. The company’s Mari-B field delivered the first domestic offshore gas for Israel in 2004, and the Tamar field (8.3 Tcf recoverable), which was discovered in 2009 currently fuels over 70 percent of the country’s electricity generation.

The Leviathan field, discovered in December 2010, contains around 22 Tcf of recoverable gas (around 35 Tcf gas in place) and once onstream will ensure that over 90% of the country’s electricity will be generated from gas. Interest in the Leviathan project is split between Noble Energy (39.66% working interest + Operator), with Delek Drilling LP (45.34%) and Ratio Oil Exploration LP (15%).

Gas started flowing from the field on 31 December 2019 and once fully operation Phase 1 will produce 1.2 Bcf/d. The field is being developed using a 120 km subsea tieback that connects production wells to a fixed platform located offshore and is then piped onshore into the INGL (Israel Natural Gas Lines) national gas transmission system. On 15 January 2020, Israel and Egypt announced that gas will also be exported to Egypt via the East Mediterranean Gas Co. (EMG) Arish–Ashkelon pipeline, which connects southern Israel to Egypt's Sinai Peninsula.

The pipeline was originally built to export gas from Egypt to Israel and has been idle for six years due to domestic gas shortages in Egypt and several attacks. The East Mediterranean Gas Company (EMG) is the owner and operator of the Arish–Ashkelon pipeline and is owned by Mediterranean Gas Pipeline Ltd, which in turn is owned by the Evsen Group of Companies (28%), Merhav (25%), PTT (25%), EMI-EGI LP (12%), and Egyptian General Petroleum Corporation (EGPC)(10%).

Egypt is dedicated to narrowing its fiscal deficit and reducing debt levels and one of the ways in which it will achieve this is by becoming a regional gas hub, with exports spearheaded by Shell’s Ikdu Egyptian LNG (ELNG) at and Union Fenosa Gas’s (UFG) Damietta LNG facilities and it is also considering pipelines to the EU in the future.

Before the advent of gas from Eni’s Zohr field most of the feed stock for the ELNG plant came from the mature offshore Simian and Sapphire fields, with just a very small proportion supplied by the national grid, whilst most of Damietta’s feedstock is derived from established fields in the West Delta Deep Marine (WDDM) Concession Area. Eni’s Zohr discovery on the Sharouk block in August 2015 was the largest gas discovery in Egypt and the largest in the Mediterranean. The field was fast-tracked and was producing gas in 2017, by August 2019 it was producing over its planned FID rate of 2.7 billion cubic feet per day (bcfd) and it is expected to exceed 3.2 bcfd in January 2020.

Eni operates and holds a 60% interest in the Shorouk licence, partnered by Rosneft 30% and BP 10%. The company is the co-Operator of the project through Petrobel, which is jointly held by Eni and the state corporation Egyptian General Petroleum Corporation (EGPC), on behalf of Petroshorouk, which is jointly held by Eni and the state company Egyptian Natural Gas holding Company (EGAS).

The Cypriot Government is hoping at the Aphrodite and other discoveries in the Cypriot Exclusive Economic Zone (EEZ) could transform its fortunes and is also promoting the creation of an Eastern Mediterranean Gas Corridor to Europe. Aphrodite was drilled on Block 12 and was discovered on 28 December 2011, by Noble Energy it contains around 7 Tcf recoverable gas.

On 6 November 2019 the government approved a $3.5 billion development plan, with Phase 1 comprising 5 production wells, producing 800 mmcfd with produced gas exported to Egypt by 2025. In February 2018, Eni announced that Calypso-1 on Block 6 was a 6-8 Tcf gas discovery and in February 2019, ExxonMobil announced the Glaucus-1 discovery on Block 10 had encountered a further 6-8 Tcf gas in place (4.55 Tcf recoverable). Interest in the Aphrodite Development Area is split between Noble Energy (35% + Operator), with Delek Drilling (30%) and Shell through BG (35%). Interest in Block 6 is split between Eni (60% + Operator) and Total (40%), whilst Block 10 is split between ExxonMobil (60% + operator) and Qatar Petroleum (40%).

Noble Energy claims the development of offshore gas resources has facilitated carbon dioxide reductions in Israel by 350 million tons, the equivalent to taking all the cars in Israel off the road for 25 years. In Egypt, the government which is committed to phasing out phasing out energy subsidies in three years and is importing gas from its former foe and Israel is also expected to take gas from the Cypriot Exclusive Economic Zone (EEZ) in the future. Some tensions remain, in 2010, Lebanon argued that the Leviathan field extended into Lebanese waters and as recently as December 2019, the Israeli government announced that it was opposed to the development of the Aphrodite field until a dispute over the border with Israel's Yishai gas field was settled.

In November 2019, Egypt, Greece and Cyprus launched joint military exercises in the Mediterranean with the aim of meeting the “growing challenges” in the region and on 28 November Turkey and Libya’s Government of National Accord (GNA) signed an agreement defining an offshore boundary between Turkey’s EEZ claim and Libya’s EEZ, further complicating the development of an Eastern Mediterranean Gas Corridor to Europe.

So, what next for the area: Several agreements and bilateral agreements between countries led to a series of new awards and licensing rounds in the early 2000’s, which led to the discovery of over 70 Tcf gas in the Eastern Mediterranean. Further rounds through 2018-2019 may have had limited successes in many countries, but this has not dissuaded the Governments and Hydrocarbon Agencies in Lebanon, Israel, Cyprus and Egypt which may launch further rounds or make out of round awards through 2020-2021. Likewise exploration activities continue, even in disputed areas, on 19 January 2020, the Turkish Government announced that the Turkish Drillship Yavuz had been mobilised to drill “Lukushka-1” well on Block G, a licence which was awarded by the Turkish Republic of Northern Cyprus (TRNC) government to Turkish Petroleum in 2011.